Cases of Termination of Investment Project Operation under the Latest Investment Law

Long Phan Consulting observes that termination of investment project operation has drawn significant attention from investors since the Investment Law 2025 (Law No. 143/2025/QH15) took effect on March 1, 2026, replacing the Investment Law 2020. Article 36 of the new Investment Law not only retains the investor’s right to voluntarily terminate a project but also adds new grounds allowing the investment registration authority to terminate a project, or part of it, such as where a sham civil transaction is found or an economic organization has been dissolved without the project being resolved. This article analyzes the applicable cases, procedures, and legal consequences investors should note.

What Is Termination of Investment Project Operation?

Termination of investment project operation means the legal effect of a project comes to an end, which may lead to revocation of the Investment Registration Certificate and the termination of the investor’s rights and obligations regarding the project.

Applicable Legal Basis

Since March 1, 2026, termination of investment project operation has been governed by Article 36 of the Investment Law 2025. This provision replaces the Investment Law 2020, which expired on the effective date of the Investment Law 2025 under Clause 4, Article 51 of the Investment Law 2025. The legal basis is Article 36 and Clause 4, Article 51 of the Investment Law 2025.

Distinguishing “Termination” from “Suspension” of Project Operation

Suspension is a temporary status, allowing the project to resume once the cause of suspension is resolved. Termination ends the project entirely and typically leads to revocation of the Investment Registration Certificate. Many investors confuse the two concepts, though the law treats them separately: suspension under Article 35 and termination under Article 36 of the Investment Law 2025. The legal basis is Article 35 compared with Article 36 of the Investment Law 2025.

Cases Where the Investor May Voluntarily Terminate the Project

Under Clause 1, Article 36 of the Investment Law 2025, an investor has the right to proactively terminate an investment activity or project in three cases. Because the investor itself decides these cases, they carry lower legal risk than State-ordered termination.

The Investor Decides to Terminate the Project

The investor has the right to decide to terminate the project’s operation without needing to prove a specific reason under law. The legal basis is Point a, Clause 1, Article 36 of the Investment Law 2025.

Termination under Conditions Set in the Contract or Corporate Charter

The project terminates when a termination condition agreed by the parties in a contract, or set out in the charter of the enterprise implementing the project, occurs. The legal basis is Point b, Clause 1, Article 36 of the Investment Law 2025.

The Project’s Operating Term Expires

A project within an economic zone has an operating term of up to 70 years. A project outside an economic zone has a term of up to 50 years, which may extend to a maximum of 70 years for projects in disadvantaged areas, large-capital projects with slow capital recovery, high-tech park infrastructure projects, or projects eligible for special investment incentives. Upon expiry, an investor wishing to continue the project and meeting the statutory conditions may be considered for an extension, except for projects using outdated technology or required to transfer assets to the State without compensation. The legal basis is Point c, Clause 1, Article 36 and Article 31 of the Investment Law 2025.

Cases Where the Investment Registration Authority Terminates the Project

Clause 2, Article 36 of the Investment Law 2025 sets out 9 cases in which the investment registration authority has the power to terminate or partially terminate a project’s operation. Investors should pay particular attention to this group, as it carries the risk of unintended project termination.

The Project Was Suspended and the Investor Cannot Remedy the Cause

The investment registration authority terminates a project that falls under the suspension grounds in Clause 2 or Clause 3, Article 35 of the Investment Law 2025, where the investor is unable to remedy the cause. Suspension grounds include: protecting relics, antiquities, or national treasures; remedying environmental violations; implementing labor safety measures; following a court judgment, decision, or arbitral award; the investor having been penalized for violating approved investment content and continuing to violate it; or a decision of the Prime Minister for national defense, security, or environmental reasons. The legal basis is Point a, Clause 2, Article 36, referencing Clause 2 and Clause 3, Article 35 of the Investment Law 2025.

The Project Is Delayed More Than 24 Months Past the Committed Progress Deadline

The 24-month period is counted from the deadline for completing the operational objective stated in the investment policy approval document or the Investment Registration Certificate. If the investor fails to meet this objective and does not fall under a case eligible for progress adjustment, the project is terminated, except where the project’s land has been recovered under Point dd, Clause 2, Article 36. This deadline is calculated strictly, with no extension mechanism outside the statutory cases, so investors should pay close attention. The legal basis is Point b, Clause 2, Article 36 of the Investment Law 2025.

The Investor Loses the Right to Use the Investment Location and Fails to Adjust Within 6 Months

A project is terminated if the investor is no longer permitted to use the investment location and fails to complete the location-adjustment procedure within 6 months from the date the right to use the location ends, except where the project’s land has been recovered. The legal basis is Point c, Clause 2, Article 36 of the Investment Law 2025.

The Project Has Been Suspended for 12 Months and the Authority Cannot Reach the Investor

If a project has been suspended and, after 12 months from the suspension date, the investment registration authority cannot contact the investor or its lawful representative, the project’s operation is terminated. The legal basis is Point d, Clause 2, Article 36 of the Investment Law 2025.

The Project’s Land Is Recovered under Land Law

An investment project subject to land recovery under land law is automatically terminated. The legal basis is Point dd, Clause 2, Article 36 of the Investment Law 2025.

Failure to Make a Deposit or Provide a Guarantee for the Deposit Obligation

This applies to projects required to secure project implementation under Article 30 of the Investment Law 2025, namely projects requesting land allocation, land lease, or a change in land use purpose from the State. If the investor fails to make the deposit or provide a bank guarantee for the deposit obligation, the project is terminated. The legal basis is Point e, Clause 2, Article 36 and Article 30 of the Investment Law 2025.

Carrying Out Investment Based on a Sham Civil Transaction

This is an entirely new ground compared with the Investment Law 2020. If an investor carries out an investment activity based on a sham civil transaction under civil law, the investment registration authority has the power to terminate the project. The legal basis is Point g, Clause 2, Article 36 of the Investment Law 2025.

Following a Court Judgment, Decision, or Arbitral Award

A project is terminated where an effective court judgment, decision, or arbitral award determines its termination. The legal basis is Point h, Clause 2, Article 36 of the Investment Law 2025.

The Economic Organization Has Been Dissolved without Terminating or Transferring the Project

This is a newly added ground addressing a practical gap where an enterprise has been dissolved but its investment project remains “pending,” neither terminated nor transferred, and ownership has not been reassigned under law. The legal basis is Point i, Clause 2, Article 36 of the Investment Law 2025.

What Is New Compared with the Investment Law 2020

Compared with the Investment Law 2020, the Investment Law 2025 significantly revises the grounds for terminating an investment project, particularly those decided by the investment registration authority.

Three Entirely New Grounds Added

The Investment Law 2025 adds three entirely new grounds compared with the previous law: investment based on a sham civil transaction (Point g); termination following a court judgment, decision, or arbitral award, now explicitly set out as a separate ground (Point h); and a dissolved economic organization whose project has not been terminated or transferred (Point i). The legal basis is Clause 2, Article 36 of the Investment Law 2025.

The 24-Month Delay Threshold Is Now an Independent Ground

The Investment Law 2025 specifically sets the 24-month delay threshold, counted from the committed progress deadline, as an independent ground for termination, making it easier for investors and authorities to apply than under the previous regulation. The legal basis is Point b, Clause 2, Article 36 of the Investment Law 2025.

Legal Consequences of Project Termination

When an investment project is terminated, the investor faces two main groups of legal consequences: revocation of the Investment Registration Certificate and the obligation to liquidate the project and handle its assets.

Revocation of the Investment Registration Certificate

The investment registration authority decides to revoke the Investment Registration Certificate when a project is terminated under Clause 2, Article 36, meaning termination decided by the authority, except where only part of the project is terminated. The legal basis is Clause 6, Article 36 of the Investment Law 2025.

Obligation to Liquidate the Project and Handle Assets and Land Use Rights

The investor must independently liquidate the investment project under asset-liquidation law once the project’s operation terminates. Handling the land use right and assets attached to land follows land law and other relevant law. The legal basis is Clause 4 and Clause 5, Article 36 of the Investment Law 2025.

Order and Procedure for Terminating an Investment Project

The procedure for terminating investment project operation is set out in detail in Clause 2, Article 66 of Decree 96/2026/ND-CP, effective from March 31, 2026, and differs depending on the ground for termination.

Procedure for Voluntary Termination by the Investor

Where the investor decides to terminate the project under Point a, Clause 1, Article 36 of the Investment Law 2025, the investor must notify and submit the termination decision, the Investment Policy Approval Decision (if any), and the Investment Registration Certificate (if any) to the investment registration authority within 15 working days from the date of the decision.

Where termination occurs under a condition in a contract or corporate charter, or upon expiry of the operating term (Point b or c, Clause 1, Article 36 of the Investment Law 2025), the investor must notify and submit the same documents within 15 working days from the termination date, together with a copy of the document recording the termination.

In both cases, the investment registration authority notifies the relevant authorities of the termination within 3 working days from the date it receives the complete documents. The legal basis is Clause 2, Article 66 of Decree 96/2026/ND-CP.

Procedure When the Investment Registration Authority Decides on Termination

Where a project is terminated under Clause 2, Article 36 of the Investment Law 2025, the investment registration authority decides to terminate the project’s operation and simultaneously revokes the Investment Policy Approval Decision (if any) and the Investment Registration Certificate already issued for the project.

For a project subject to investment policy approval, the investment registration authority terminates the project only after obtaining the opinion of the investment policy approval authority. The Investment Policy Approval Decision and the Investment Registration Certificate cease to be effective from the date the termination decision takes effect. The legal basis is Clause 3, Article 36 of the Investment Law 2025 and Clause 2, Article 66 of Decree 96/2026/ND-CP.

Practical Notes to Help Investors Avoid the Risk of Termination

Investors should periodically review project progress against the deadlines stated in the investment policy approval document or the Investment Registration Certificate, so they can proactively apply for a progress adjustment before exceeding the 24-month threshold.

Enterprises should complete the deposit obligation or bank guarantee on time if the project is subject to investment implementation security. When a project is temporarily unable to proceed for objective reasons, the investor should properly notify suspension rather than allow the investment registration authority to lose contact for 12 months. Where issues arise concerning the investment location, the investor should proactively complete the location-adjustment procedure within 6 months to avoid unintended termination.

Investment Project Termination Consulting and Authorized Representation Services

Long Phan Consulting provides investment project termination consulting and authorized representation services for enterprises, investors, and other relevant clients. Our scope of support includes:

• Reviewing the legal grounds for termination of investment project operation, examining the project dossier and implementation status, and determining whether the project falls within a statutory termination case.
• Advising on available courses of action, including assessing the feasibility of adjusting the project schedule, changing the project location, remedying violations, or voluntarily terminating the project in accordance with applicable procedures.
• Advising on the investment project termination procedure, including procedural steps, required dossier components, competent receiving authority, and obligations to be performed by the enterprise or investor.
• Drafting the project termination dossier, including the termination notice, explanatory documents, supporting materials, and other documents to be submitted to the investment registration authority.
• Reviewing and finalizing the dossier to ensure completeness and consistency before submission, and assisting with amendments or supplementary documents requested by the competent authority.
• Representing clients, within the authorized scope, in submitting dossiers, working with competent authorities, providing explanations, responding to requests, and monitoring the handling process before the investment registration authority.
• Advising on complaints against decisions terminating investment project operation, including reviewing the legal grounds of the decision and assessing the client’s basis for filing a complaint where appropriate.
• Advising on project liquidation following termination, including the handling of contracts, debts, assets, receivables, liabilities, and other remaining rights and obligations.
• Advising on the handling of land and project assets after termination, including assessing options relating to land use rights, assets attached to land, and other legal matters arising from the termination of the project.

Enterprises, clients, or investors seeking a preliminary assessment may send their documents via email at info@longphanpmt.com or Zalo/WhatsApp at +84 906 735 386.

Frequently Asked Questions on Termination of Investment Project Operation

The following frequently asked questions clarify common legal issues concerning the grounds, procedures, consequences, and regulatory requirements for terminating investment project operation in Vietnam.

Conclusion

Termination of investment project operation under the Investment Law 2025 is subject to stricter regulation than under the previous law, with 9 grounds for termination by the investment registration authority and 3 entirely new grounds added. Because the legal consequences may include revocation of the Investment Registration Certificate and asset-liquidation obligations, investors should proactively review project progress, deposit obligations, and legal status to avoid the risk of unintended termination. Long Phan Consulting is ready to assist with the assessment and handling of each specific case; contact hotline 1900636389.